- The Washington Times - Wednesday, November 17, 2004

The European Union yesterday said it would slap tariffs on U.S.-made clothing, cranes, sweet corn and other products next year if Congress does not repeal legislation ruled illegal by the World Trade Organization (WTO).

The products were specifically chosen to target U.S. industries that would press Congress to comply with the WTO ruling. Lawmakers, however, are unlikely to act this year.

The WTO in January 2003 ruled against the popular U.S. law, known as the Byrd Amendment, that directs money to American companies from their foreign competitors.

Named for Sen. Robert C. Byrd, the West Virginia Democrat who wrote it into a broader bill in 2000, the law has the Bureau of Customs and Border Protection collecting duties on products the government says are unfairly subsidized or sold below cost in the United States. Those duties are paid to the U.S. companies that lodges the complaint.

The rule compelled foreign companies to pay as much as $799 million to U.S. makers of bearings, steel, food and other products since 2001.

The 25-nation European Union has not decided an exact date to start sanctions, though early next year is likely. It prepared the list of products targeted for retaliation ahead of a Nov. 24 WTO meeting, where it expects to receive formal approval to raise tariffs.

The bloc has not decided how high to set tariffs. Photocopiers, plastic furniture, mobile homes and hand drills also would be targeted.

Many of the same industries are threatened repeatedly when the United States violates international trade rules. Apparel, for example, was hit by European tariffs because of an illegal export subsidy and was targeted by Europe when the Bush administration violated international trade rules with steel tariffs.

“It’s a problem because we’re looking for reasons to promote the competitiveness of the industry that is here [in the United States]. The fact that we’re getting hit for the third time says to companies, ‘move your production somewhere else,’” said Stephen Lamar, senior vice president at the American Apparel & Footwear Association.

Canada, Mexico, Japan, Brazil and other major trade partners also brought a case to the WTO and won the right to impose retaliatory fines equal to 72 percent of the customs payouts.

The Bush administration said it would work with Congress to bring the U.S. law into compliance, but that it is a complex matter that would take time to fix. “We intend to comply with WTO rulings,” said Neena Moorjani, spokeswoman for the U.S. Trade Representative’s Office.

A Senate Finance Committee aide said lawmakers probably would act to alter the Byrd Amendment next year.

Separately, two U.S. senators angered Canada yesterday when they introduced a bill to distribute roughly $3 billion in duties paid by Canadian lumber companies to U.S. competitors. The Canadian funds, now held in escrow because of ongoing legal disputes, would be paid out under terms of the Byrd Amendment.

Sen. Larry E. Craig, Idaho Republican, and Sen. Max Baucus, Montana Democrat, are sponsoring the legislation, though it has little chance of passing this year.

An aide for Mr. Baucus said the measure was intended to keep Canada at the bargaining table as the two sides try to resolve the fight over imports of Canadian lumber used in housing construction.

U.S. companies say Canadian businesses receive unfair subsidies, and the United States has responded with duties. Canada rejects the charges. The claims and counterclaims are mired in WTO and North American Free Trade Agreement (NAFTA) litigation.

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